AV Concept Holdings Limited — Proxy Solicitation & Information Statement 2000

Aug 24, 2000

AV CONCEPT HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at The Board Room, 7th Floor, The Dynasty Club, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on Friday, 22 September 2000 at 11:00 a.m. for the following purposes:

1. To receive and consider the audited Financial Statements and the Reports of the Directors and Auditors for the year ended 31 March 2000.

2. To re-elect Directors and to authorise the Board to fix the Directors' remuneration.

3. To appoint Auditors and to authorise the Board to fix their remuneration.

4. To consider and, if thought fit, pass (with or without amendments) the following resolution as an Ordinary Resolution:

"THAT:

(a) a bonus issue of new ordinary shares (the "Bonus Shares") of HK$0.10 each in the capital of the Company on the basis of one bonus share for every ten existing shares held by shareholders whose names appear on the register of members of the Company on 22 September 2000 (the "Record Date"), be and is hereby approved;

(b) conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") granting the listing of and permission to deal in the Bonus Shares, based on 203,996,012 ordinary shares in issue as at 23 August 2000, a sum of HK$2,039,960 standing to the credit of the share premium account of the Company, or such sum as shall be necessary to give effect to the issue of the Bonus Shares pursuant to this Resolution, be capitalised and the Directors be and are hereby authorised to apply such sum in paying up in full at par such number of Bonus Shares to be allotted and credited as fully paid to shareholders on the Record Date; and

(c) the Bonus Shares to be allotted and issued pursuant to this Resolution shall rank pari passu in all respect with the existing issued ordinary shares of the Company and that no fractional shares shall be allotted to shareholders of the Company but fractional entitlements shall be aggregated and sold for the benefit of the Company; and that the Directors of the Company be and are hereby authorised to do all such acts and things as they consider necessary or expedient to give effect to the bonus issue of shares as mentioned above."

1. To consider and, if thought fit, pass (with or without amendments) the following resolution as an Ordinary Resolution:

"THAT:

(a) subject to paragraph (b) of this Resolution, the exercise by the Directors during the Relevant Period of all the powers of the Company to purchase its own shares on the Stock Exchange or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

(b) the aggregate nomiral amount of the shares to be purchased pursuant to the approval in paragraph (a) above shall not exceed 10% of the total nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution as enlarged by the bonus issue of shares as approved in Resolution 4 set out in the notice convening this meeting, and the said approval shall be limited accordingly; and

(c) for the purpose of this Resolution, "Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:

(i) the conclusion of the next Annual General Meeting of the Company;

(ii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting; and

(iii) the expiration of the period within which the next Annual General Meeting of the Company is required by any applicable law or the Company's Articles of Association to be held."

1. To consider and, if thought fit, pass (with or without amendments) the following resolution as an Ordinary Resolution:

"THAT:

(a) subject to paragraph (c) of this Resolution, the exercise by the Directors during the Relevant Period of all the powers of the Company to issue, allot and deal with additional shares in the capital of the Company, and to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which would or might require the exercise of such power be and is hereby generally and unconditionally approved;

(b) the approval in paragraph (a) of this Resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which would or might require the exercise of such power after the end of the Relevant Period;

(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares of the Company upon the exercise of the rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into shares of the Company; or (iii) an issue of shares of the Company as scrip dividends pursuant to the Articles of Association of the Company from time to time; or (iv) an issue of shares of the Company under any option scheme or similar arrangement for the grant or issue to employees of the Company and/or any of its subsidiaries of shares of the Company or rights to acquire shares of the Company, shall not exceed 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution as enlarged by the bonus issue of shares as approved in Resolution 4 set out in the notice convening this meeting, and the said aprpoval shall be limited accordingly; and

(d) for the purpose of this Resolution, "Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:

(i) the conclusion of the next Annual General Meeting of the Company;

(ii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting; and

(iii) the expiration of the period within which the next Annual General Meeting of the Company is required by any applicable law or the Company's Articles of Association to be held.

"Rights Issue" means an offer of shares of the Company open for a period fixed by the Directors to the holders of shares whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares as at that date (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company)."

1. To consider and, if thought fit, pass (with or without amendments) the following resolution as an Ordinary Resolution:

"THAT subject to the passing of Resolution 5 set out in the notice convening this meeting, the general mandate granted to the Directors and for the time being in force to exercise the powers of the Company to allot shares and to make or grant offers, agreements and options which might require the exercise of such powers referred to in Resolution 6 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of shares in the capital of the Company purchased by the Company under the authority granted pursuant to Resolution 5 set out in the notice convening this meeting, provided that such extended amount shall not exceed 10% of the total nominal amount of the share capital of the Company in issue as at the date of the passing of this Resolution."

By Order of the Board

Ha Shu Tong

Managing Director

Hong Kong, 23 August 2000

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll or on a show of hands, vote on his behalf. A proxy need not be a member of the Company.

2. To be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be lodged with the Company's branch share registrar, Tengis Limited, 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting.

3. The register of members will be closed from Monday, 18 September 2000 to Friday, 22 September 2000 (both days inclusive) during which period no transfer of shares will be registered. In order to qualify for the proposed bonus issue of shares, all transfers of shares accompanied by the relevant share certificates must be lodged with the Company's branch share registrar, Tengis Limited, 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 4:00 p.m. on Friday, 15 September 2000.

4. An explanatory statement containing further details regarding resolutions 4 to 7 above will be sent to the shareholders together with the 2000 annual report.